In 2018, S.C. legislators cut a deal with Dominion Energy to buy SCANA, and customers were promised a 15 percent cut in their utility rates. Now – two years later – Dominion is asking to raise its rates on customers by almost 8 percent.
Dominion customers received a notice that the first of three public hearings would be held Monday, Nov. 9. The notice informed them that they could testify if they registered between Oct. 5 and Nov 9.
The problem is that customers didn’t receive the PSC’s notice until around Oct 21 – two-and-a-half weeks after the first day of registration. Also, the notice was complicated and highly unlikely to be understood by anyone outside the energy industry and state regulators.
Most customers would likely have to do some time-consuming research to fully understand the proposal, much less be prepared to testify about it.
Below is a summary that outlines (and translates) what the notice actually means for Dominion customers.
What does the notice tell ratepayers?
The PSC notice says:
[This is the first sentence of the notice] “DESC has not sought a rate increase for base electric rates since 2012 exclusive of the changes in the fuel component and recovery of costs and revenues associated with demand side management and energy efficiency programs and other rider-based charges.”
Translation: “DESC” means Dominion Energy South Carolina – which has not been delivering service in South Carolina since 2012, but rather since 2019. Technically, anything prior to 2019 refers to an action taken by SCANA, the former owner of South Carolina Electric & Gas Company (SCE&G).
“Base electric rate” is the rate at which customers are charged for power before other “programs” and costs are added.
“…(E)xclusive of changes in the fuel component and recovery of costs,” etc. That means simply that SCANA (now Dominion), has in fact adjusted rates, which include increases, since 2012.
“(F)uel component” is the cost paid by customers for Dominion’s purchase of fuel, which can change each year
“(D)emand side management” are programs urging customers to reduce energy consumption, including:
- an online store that sells special lightbulbs and other energy-efficient products. Dominion charges customers to purchase these products while also charging customers a fee on their bills
- offering cash back for customers who recycle their old refrigerators
- rebates for buying and installing certain energy-efficient equipment
special appointments with Dominion’s agents to discuss power use and get suggestions on how cut the cost of energy use.
“(E)nergy efficient programs” appears to be the same as demand side management, not a separate program
“(O)ther rider-based charges” means special programs and charges that are tacked on to a customer’s bill
Each of these are examples of potential rising costs that customers could have paid over the years, depending on what was requested and approved by the PSC. The notice also ignores the fact that customers saw constant rate hikes resulting from the failed V.C. Summer nuclear project until those rates were slashed in 2018.
Regardless of the wording, customer power bills did increase within that time, and Dominion wants another rate increase of almost 8 percent.
The PSC notice says:
“[Dominion has] made continued investment in assets and operating resources required to serve an expanding customer base…”. Dominion claims it has made those investments to “maintain safety, reliability and efficiency,” and to “meet increasingly stringent reliability, security and environmental requirements.”
Also, Dominion has “experienced an increase in depreciation expense and property tax associated with these investments.”
Translation: Dominion is spending more money than it used to in order to provide electric service.
These expenses include purchasing new equipment like transformers and power lines, along with a greater tax burden due to new land and facilities. The age of these assets has an effect on their financial statements and may reduce how much can be written off as a tax deduction.
These claims are paired with their argument that electric bills haven’t increased in roughly eight years, despite customers being charged varying amounts for special programs and paying more for the failed V.C. Summer project.
New charges and rule changes
On top of charging customers more for basic electric service, Dominion wants to introduce new program costs, remove a customer discount, and make serious changes to their terms of service.
“A vegetation management accrual system to establish a stable basis for funding the vegetation control plans…” means the company wants to charge customers extra for the cost of cutting down trees and trimming vegetation, often on customers’ private property.
“To restore the collection of the Storm Damage Reserve component of rates” means there was once a fee charged for the cost of saving money in a reserve to cover storm damage…and they want to put it back in.
“To discontinue the Tax Rider authorized in 2018 to return savings under (federal tax cut) to customers.” Dominion claims these savings (a clearly marked 3.07% discount applied to each power bill) will be returned to customers through their rates going forward. But by making them invisible, there’s no way to know exactly how the savings are being applied, and Dominion did not clarify how long they will last.
In addition, Dominion wants to “make certain changes in its General Terms and Conditions, which is supposed to serve as the agreement with customers, but really customers have no choice but to accept those terms…if they want power.
The changes are not explained, and anyone who wants the specifics has to read Dominion’s lengthy application. The proposed changes include:
- to allow Dominion to shut off the power of someone who makes a “direct or implied threat” against workers or the company itself. Those terms aren’t defined, and Dominion does not explain how turning off the power resolves any concerns regarding the alleged threat. There is no apparent process to determine if the threat is credible, nor any path to restore power to the customer. If a customer manages to get their power turned back on, they must pay a $25 reconnection charge.
- to allow Dominion to charge customers for special equipment if they are operating such things as a tankless electric water heater, an electric vehicle charger, a solar panel — and they want to eliminate the requirement that installation charges be “reasonable.”
Hearings held two weeks ago
The Public Service Commission held public hearings on the rate request two weeks ago, but commissioners have no direct accountability to the public. Rather, it is legislators – who routinely evaluate each commissioner – that bear responsibility for the condition of South Carolina’s energy industry.
In fact, the only people who are directly accountable to customers of regulated utilities are their House members and their Senators. As long as legislators maintain control over the energy system and its regulators, there cannot be a system that listens to and serves the public.
The South Carolina Policy Council was founded in 1986 as an independent, private, non-partisan research organization to promote the principles of limited government, free enterprise, and individual liberty and responsibility in the state of South Carolina.
